Inventory Management | Stock Valuation

FIFO or weighted-average, per item, posted on every movement.

Choose the valuation method per item category or warehouse. FIFO, weighted average, standard cost or specific identification. GL posts on every movement; period-end reconciles to the inventory ledger within tolerance. Form 3CD Clause 14 pre-populated.

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How it works

From method choice to period-end reconciliation.

Step 01

Method per item category

FIFO for perishables, weighted average for commoditised items, standard cost for manufacturing, specific identification for high-value serial items. Configurable per category.

Step 02

Movement posts to GL

Every receipt, issue, transfer and adjustment posts to stock and the inventory GL in one transaction. Cost-of-sales and gross margin update on dispatch.

Step 03

Period-end reconciliation

The stock register and the inventory GL reconcile within tolerance at month-end. Variance surfaces for resolution before close.

Step 04

Form 3CD Clause 14 pre-populated

Method of valuation, change of method (if any), impact of change all drafted from the configured policy. CA reviews and finalises.

What the system does

Capability, input, output.

Capability	Input	Output
Method configuration	Item category + valuation policy	Per-item method assignment
FIFO costing	Receipt cost layers	Issue costed on oldest layer
Weighted average	All receipts in the period	Period weighted-average cost
Standard cost	Standard rate + variance tracking	Variance to GL for analysis
Specific identification	Serial-level cost	Issue costed at the unit level
GL reconciliation	Stock register + inventory GL	Period-end reconciliation report
Form 3CD Clause 14	Method + change history	Pre-populated tax-audit schedule

Method configuration

Input

Item category + valuation policy

Output

Per-item method assignment
FIFO costing

Input

Receipt cost layers

Output

Issue costed on oldest layer
Weighted average

Input

All receipts in the period

Output

Period weighted-average cost
Standard cost

Input

Standard rate + variance tracking

Output

Variance to GL for analysis
Specific identification

Input

Serial-level cost

Output

Issue costed at the unit level
GL reconciliation

Input

Stock register + inventory GL

Output

Period-end reconciliation report
Form 3CD Clause 14

Input

Method + change history

Output

Pre-populated tax-audit schedule

Compliance + integrations

Valuation that audits clean.

AS-2 / Ind-AS 2 compliance with the chosen method. Method change requires CFO approval and CA review (per AS-1 consistency principle). Form 3CD Clause 14 drafts from the system policy.

Regulations we work within

AS-2 / Ind-AS 2

FIFO, weighted average and specific identification all aligned with the standard.
Section 145A, Income Tax Act

Inclusive method of valuation (tax + duty) supported.
Form 3CD, Clause 14

Method, change and impact pre-populated.

Connects to

Tally Prime Stock valuation sync
Zoho Books Native connector

Stock Valuation FAQ

What buyers ask.

Can we use different methods for different categories?

Yes. FIFO for perishables, weighted average for commoditised items, standard cost for manufactured items. The system supports per-category method assignment with the CA-approved policy on file.

What about Section 145A inclusive method?

Section 145A requires the value of inventory to include taxes and duties. The system supports the inclusive method as a configuration; the GST and customs duty paid on receipt loads to the inventory cost. The exclusive method is also available where the entity opts in.

How is a method change handled?

Method changes require CFO approval and a transition workpaper showing the impact on opening stock and on the period's P&L. The CA reviews under AS-1 consistency principle. The change posts on the cut-over date with the audit trail captured.

Reconciliation between stock register and inventory GL?

Both update in the same transaction, so they should match. Tolerance variance (typically ₹100 to 1,000 per item) is configurable. Beyond tolerance, the system surfaces the variance for the controller to resolve before close.

Related features

Run last quarter's valuation on your data.

Connect one warehouse, free. Pick a method per category. The system runs the valuation against your last 90 days of movements and surfaces the GL reconciliation gap.